Have you ever asked yourself why Australian ebay sellers prices are usually considerably higher than ebay sellers from China? Or maybe you've asked yourself why ebay sellers from China are able to offer free postage as well as very low prices while Australian ebay sellers usually always have postage fees attached in some form and higher prices than the Chinese eBay sellers? The answer is pretty simply. The postal services prices in China are extremely low due to many factors, and the biggest factor in what determines their postal prices is probably the fact that China is the worlds largest exporter. Cheap labour also has a lot to do with it.
Australia does not have cheap labour, we do not make cheap products (we don't really make anything, we just sell products in their raw forms) and we are not major exporters. The reality is that we don't export anything that our main export markets can't find somewhere else. Nothing is cheap in Australia, especially not our postal services. To send a small parcel within Australia costs a minimum of $6.50, provided it adheres to the small parcel weight and size limit. It is cheaper to send an item of the same size/weight to Australia from China than it is to send an item from Australia within Australia. It is cheaper to send something from China to NZ than it is to send an item from Australia to NZ. Sounds ridiculous doesn't it? But it is unfortunately true. Even if you sell enough items regularly for a delivery company to agree to offering you a discounted delivery service, the discount is not usually more than $1 off the original cost of the service (for example if the parcel usually costs $6.50 they might offer you a reduced cost to $5.50).
Now that you have a bit of an understand as to the massive price difference in regards to the 2 postal services, hopefully you'll understand why Australian ebay sellers have to charge postal costs in 1 form or another.
Look at it like this... if i am selling an item for $10 and of that am only making a 50% profit ($5), postage will end up costing $6.50 but i don't add a postage fee and hope that the buyers will raise the bid high enough to cover the postage cost (bid will have to rise to $16.50 to cover postage and $5 of the remaining $10 is my profit), but they don't, i have not only not made a profit, but i haven't even made my money back and am now at a loss . I paid $5 for the item, the item sold through bidding for $10 and i have to pay $6.50 to post it, leaving $3.50 which is a loss of $1.50. A small occasional loss is ok, but when you have Chinese manufacturers who for example will make something that costs them $1.0 will sell it Australian ebay sellers for $5 who will then resell it on ebay for whatever they feel is a fair profit margin, but those same manufacturers are now also selling on ebay and because they are the manufacturers, they can sell it for much less than Australian importers and suddenly, Australian businesses can no longer compete because not only are our postal service prices high, but now the companies who sold to us wholesale are now selling the direct to the public on ebay basically forcing Australian ebay businesses to struggle to make a profit, or out of business altogether.
So next time you're shopping on ebay, paying those few extra dollars to an Australian ebay seller would go a long way to helping out our businesses stay afloat and somewhat competitive.
China Postal Service Hurting Australian Business
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30 June 2012
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